The Wall Street securities industry produced its best first-half pre-tax profits since 2010 when adjusted for inflation, but the second half of the year could be threatened by a slowing global economy and other factors, New York State Comptroller Thomas DiNapoli said Friday.
The comptroller's report on the first six months of 2019 said pre-tax profits hit $15.1 billion, up 11% from the first half of 2018.
"Uncertainties leave the second half of the year an open question," Mr. DiNapoli said in a news release. "Volatile markets, global trade tensions and political turbulence have sown economic anxiety and slowed global economic growth."
The comptroller's office, which annually issues first-half and full-year reports, measures securities-industry performance by pretax profits of broker/dealer operations of New York Stock Exchange member firms. There are about 120 firms, down from more than 200 before the 2008 financial crisis, the report said.
"While net revenue rose in the first half of 2019, growth slowed to 2.4%," the report said. "The slowdown reportedly reflected poor performance across a range of activities including equities, commodities and currencies. The securities industry also held down the growth in expenses in the first half, which contributed to profitability." First-half expenses rose by less than 1%.
The average salary, including bonuses, for industry employees in New York City was $398,600 last year, down 5.6% vs. 2017, the report said.
The securities industry accounted for 20% of all private sector wages paid in New York City in 2018, last year, even though its 181,300 jobs represented less than 5% of private sector jobs in the city, the report said.
Although securities industry employment has grown in four of the last five years, it remains 4% lower than in 2007, the year before the financial crisis, the report said. "As of September 2019, the industry was on pace to lose almost 500 jobs in 2019." Last year, it added 4,700 jobs.
The average bonus for New York City's securities industry employees' was $153,700 last year, down 17% from 2017.
"Although profitability increased significantly in the first half of 2019, the amount set aside for compensation, including bonuses, declined by almost 1% compared to the same period in 2018," the report said. "Bonuses for 2019 will likely be dictated by second-half revenues."
